| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 101 === This study aims to investigate the impact of internal control weakness on the value-relevance of the financial statements. In this study, the sample consists of TSE-listed firms and OTC-listed firms from year 2006 to 2012. This study adopts the Ohlson (1995) as the empirical model to proceed the empirical tests.
The empirical result of this study shows that compared with the companies without internal control weakness, the earnings’ value-relevance of the companies with internal control weakness is lower. This means that investors don’t believe the earnings information of the companies with internal control weakness.
This study performs several additional tests including replacing the weak internal control variable by the amount of the penalty due to weak internal control, the frequency of the penalty due to weak internal control tests, and the stock price as of the end of annual report filing test, the electronics/non- electronics industry subsample test. The empirical results of these additional tests are consistent with the main test results.
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